In Frankfurt am Main in western Germany, a man held an umbrella to protect himself from the rain and walked past the euro sign in front of the former European Central Bank (ECB) building.
Kirill Kudryavtsev | Kirill Kudryavtsev AFP | Getty Images
The latest takeover battle in Europe’s banking sector is widely seen as a potential turning point for the region – especially the EU’s incomplete banking union.
In recent weeks, UniCredit has stepped up pressure on Frankfurt-based Commerzbank as it seeks to become the largest investor in Germany’s second-largest bank, taking a 21% stake.
The Milan-based bank bought a 9% stake in Commerzbank earlier this month, a potential multibillion-euro merger that appeared to have caught German authorities off guard.
David Marsh, chairman of London-based OMFIF, a group that tracks central banks and economic policy, said: “UniCredit, Italy’s largest bank, seeking to take control of Commerzbank is a watershed moment for Germany and Europe. , a move that has been discussed for a long time. explain Written comments were issued Tuesday.
Whatever the outcome of UniCredit’s takeover of Commerzbank, Marsh said the incident marked “another huge test” for German Chancellor Olaf Scholz.
The embattled German leader has firmly opposed the apparent takeover attempt, reportedly calling UniCredit’s move an “unfriendly” and “hostile” attack.
“The dispute between Germany and Italy over the UniCredit takeover – which Scholz described as unfriendly behavior – threatens to inflame relations between two of the EU’s three largest members,” Marsh said.
“Compromises can still be found,” he continued. “But hostility from Italy and Germany could stymie any meaningful steps towards completing the banking union and capital markets integration that all parties see as necessary to pull Europe out of its troubles.”
What is the European Banking Union?
Following the 2008 global financial crisis, the EU’s executive arm announced plans for a banking union in 2012 to ensure the region’s lenders were stronger and better regulated.
The project became a reality in 2014 when the European Central Bank assumed the role of bank supervisor, but was widely seen as incomplete. For example, the lack of a European Deposit Insurance Scheme (EDIS) is one of the many factors contributing to this problem. Quote as an obstacle to progress.
European leaders including German Scholz call repeatedly Strengthening European banking integration.
OMFIF’s Marsh said Germany’s opposition to UniCredit’s move against Commerzbank meant Germany “is now accused of supporting European banking integration only on its own terms”.
A German government spokesman did not immediately respond when contacted by CNBC for comment.
Commerzbank logo at a branch near the Commerzbank building in Frankfurt.
Daniel Rowland | AFP | Getty Images
Although Spanish bank BBVA shocked markets in May with an all-share takeover bid for domestic rival Banco Sabadell, hostile takeover bids are uncommon in the European banking industry.
The head of Banco Sabadell said earlier this month that a multi-billion-euro hostile takeover bid by BBVA was unlikely to succeed. Reuters reports. However, BBVA CEO Onur Genç told CNBC on Wednesday that the acquisition is proceeding “as planned.”
Spanish authorities have the power to block any merger or acquisition of banks expressed their opposition Spanish bank BBVA’s hostile takeover bid, saying it could have harmful effects on the county’s financial system.
Mario Centeno, a member of the European Central Bank’s Governing Council, told CNBC’s “European Street Signs” on Tuesday that European policymakers have been working toward a “true banking union” for more than a decade. and will continue to do so.
The Brussels-based think tank said the unfinished project means the framework for intervention in the banking crisis remains an “awkward mix” of national and EU authorities and tools Bruegel.
Asked whether the opposition to banking consolidation by leading politicians in Germany and Spain was discouraging, the ECB’s Centeno responded: “We have been pushing hard in Europe to get banking union done. There are still some issues. .
What happens next?
Thomas Schweppe, founder of Frankfurt-based consultancy 7Square and a former Goldman Sachs mergers and acquisitions banker, said Germany’s decision earlier this month to sell a small 4.5% stake to UniCredit The bank is now “involved”, whether intentionally or unintentionally.
“You know, I think we are proposing a European banking landscape, and in Germany they are supporters of strong European banks that have a good capital base and are well managed,” Schweppe told CNBC’s “Squawk Box Europe” on Wednesday. “
“If we take this seriously, I think we need to accept that European consolidation also means German banks become acquirees,” he added.
Asked how long the UniCredit-Commerzbank saga might last, Schweppe said it could last for months, “if not a year or more.” He cited the lengthy regulatory process and the need for negotiations between all stakeholders to find “acceptable” solutions.
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